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Inclusive Agribusiness & Trade Working Group Physical Meeting

Members and strategic partners of the Global Donor Platform for Rural Development’s Inclusive Agribusiness & Trade (IAB&T) thematic working group (TWG) met in Zurich/Maennedorf Switzerland to share knowledge on their specific work on IAB&T in a lively roundtable discussion on 19 June, back-to-back to the Platform's members' only Annual general Assemblyand international organisations that support policies and projects on a variety of topics surrounding inclusive agribusiness, such as sustainable value chains, private sector and market systems development, blended finance for agricultural small and medium enterprises, policy coherence between trade and development, and Aid for Trade .

The objective of the meeting was to share experiences, lessons, initiatives, publications, and/or other outputs with the intention of sparking discussion on how Platform members and partners can better position themselves in the inclusive agribusiness and agricultural trade space to meet present and future challenges.

Julie Delforce, Senior Sector Specialist, Agricultural Development & Food Security of the Australian Department of Foreign Affairs and Trade (DFAT), gave an update on an Aid for Inclusive Trade workshop that was conducted in February, 2019, organized in conjunction with World Vision Australia. Eighty participants attended the daylong workshop, which looked at the importance of aid for trade (A4T) in helping to achieve the SDGs and its high impact in LDCs. A senior DFAT official at the workshop stressed that while boosting trade does not automatically lead to development, there is a need for complimentary trade support for people, which A4T can help to spur. A booklet summarizing the workshop is forthcoming.

The highlights of the DFAT A4T workshop included

  • Looking at how technology and A4T can support one another to manage the transition of LDCs sector economies where capacity building can be an answer for low skill jobs at risk from automation;
  • The need to make market systems work better for the poor via A4T interventions to address market dysfunctions and root causes of poverty. A4T can complement market systems approaches by pushing the poorest families to build their capacities and making sure gender and disability equality are principle components of reformed market systems;
  • How A4T can strengthen the circular economy, for example, by supporting the transfer of waste. The impacts of the global waste trade need to be carefully managed so that trade and environmental policies do not undermine one another. Trade and environment agendas are fertile ground for collaboration.
  • The challenges of monitoring and evaluating A4T investments. A process framework focused on inclusive desirable outcomes is necessary.

Group feedback to this input focused on elaborating what is needed for a more inclusive market systems approach. Delforce gave an example from Nepal was given where a large market development programme with a graduation approach, similar to BRAC’s model in Bangladesh, is used to help the poorest take advantage of market opportunities by giving them a boost to directly integrate into markets. This is done by collaborating with businesses to improve the supply of inputs to farmers, working with farmers to improve their outputs to markets, connecting producers to product buyers who have market outlets, and training retailers and cooperatives about putting better information on labels.

Kidest Teklu of the International Trade Centre (ITC) highlighted a project in Ghana reflecting the market system approach that DFAT takes, wherein local cocoa farmers are linked directly to markets. The project involves Fairtrade Africa to work with all actors in the cocoa value chain to improve the quality and operations of cooperatives, who work directly with farmers, to implement agroforestry and crop diversification methods. There was a also a focus on local value addition via involving cocoa bean companies who invested in the project and received better crops from their farmer suppliers. Research institutions were also involved in the project, which is looking to expand to other Western African countries.

The roundtable discussion also touched upon the need for translating A4T to regional contextual settings and not relying on international trade agreements for market inclusivity. The domestication of A4T ideas into local actions is important because government policies will affect how people can access markets. As Simon Zbinden from the Swiss Development Corporation (SDC) stated, “markets are efficient, not inclusive”. The roundtable agreed that a whole market system perspective linked to an inclusive regional approach is necessary when applying A4T ideas, as the poorest will not necessarily benefit from international trade agreements. Yasmine Ismail, from CUTS Geneva, brought up a counter example of how a regional and international trade agreement can work to preserve the rights of people and reduce poverty by highlighting how the African Continental Free Trade Agreement uses committees to ensure that trade will not hurt the poorest. The members in meeting also stressed that there is a lack of data on regional trade agreement outcome impacts and effects on various sectors, which could be a focus for transforming market and food systems.

Paulin Zambelongo, Coordinator for the Enhanced Integrated Framework’s (EIF) Executive Secretariat, gave a presentation on how the EIF, a partnership of fifty-one countries, twenty-four donors, and eight partner agencies, works closely with governments, development organizations, and civil society to assist Least Developed Countries (LDCs) to use inclusive trade to drive sustainable development and poverty reduction (download the presentation below). EIF utilizes A4T approaches to help country at policy and capacity building levels as catalytic tools to help link farmers to markets. Zambelongo highlighted that the main challenges they face are working in fragile contexts, ensuring resource mobilisation at the country level, and better impact measurement. Discussions emerged within the round table on how to address these challenges, including reinforcing monitoring and evaluation, supporting cross border trade, both to monitor trade flows and to capacitate women to move across borders, and the need for case by case solutions for fragile settings that utilize partner and donor coordination, such as UN institutions, on the ground.

Lastly, the roundtable touched upon blended finance approaches for impact investments in agriculture. Zbinden talked about an SDC project where they partner with private investors to finance agricultural small and medium enterprises (SMEs), who are generally too big to qualify for microfinancing, but too small for traditional means of financing. 1 million USD of public money will be bundled with 30 million USD to fund 15-20 SMEs to make them bankable. The nature of the funding agreements use rigorous FAO principles of sustainability and inclusivity to ensure high standards of practice from investors and investees. Zbinden outlined that there is no interaction between SDC and the investor/investee. The public money is placed in a pot, along with the private money, and the investors decide which SMEs to invest in, which making sure they adhere to the conditions SDC has placed on their investment. The ten-year project will produce data that can help spur scientific analyses on the impact of this type of investment model. Wafaa Elkhoury, from FAO, mentioned that they have similar programs, with EU funding, to support SMEs with technical assistance, to de-risk private sector investments via public-private discussions, and value chain analysis.

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